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OFFICIAL STATEMENT NEW ISSUE RATINGS: Moody's: "Aa3" (negative outlook) - AGM (as defined herein), Underlying: "A3" BOOK ENTRY Standard & Poor's: "AAA" (negative outlook) - AGM (as defined herein), Underlying: "A-" See "RATINGS" herein. In the opinion of Bond Counsel, based upon laws, regulations, rulings and decisions, and assuming continuing compliance with certain covenants made by the Corporation, interest on the Series 2010A Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, upon the conditions and subject to the limitations set forth herein under the caption "TAX EXEMPTION." Receipt of interest on the Series 2010A Bonds may result in other federal income tax consequences to certain holders of the Series 2010A Bonds. In the opinion of Bond Counsel, interest on the Series 2010A Bonds, the Series 2010B Bonds and the Series 2010C Bonds is also exempt from income tax by the Commonwealth of Kentucky, and the Series 2010A Bonds, the Series 2010B Bonds and the Series 2010C Bonds are exempt from ad valorem taxation by the Commonwealth of Kentucky and any of its political subdivisions. KENTUCKY MUNICIPAL POWER AGENCY $53,600,000 $122,405,000 Tax-Exempt Power System Revenue Bonds Taxable (Build America Bonds - Direct Pay) (Prairie State Project), Series 2010A Power System Revenue Bonds (Prairie State Project), Series 2010B $7,725,000 Taxable Power System Revenue Bonds (Prairie State Project), Series 2010C Dated Date: Date of Issuance Due: As set forth herein on the inside front cover The Bonds will bear interest payable semiannually on March 1 and September 1 of each year (each an "Interest Payment Date"), commencing September 1, 2010, as determined in accordance with the Trust Indenture dated as of April 1, 2010 (the "Indenture"), between the Kentucky Municipal Power Agency ("KMPA") and U.S. Bank National Association, Louisville, Kentucky, as trustee (the "Trustee"). Interest is payable by check mailed to the registered owners of the Bonds at their addresses appearing on the registration books kept by the Trustee as of the applicable record date preceding each Interest Payment Date. The Bonds are to be delivered in fully registered form in the authorized denominations described in the Indenture. The Bonds are issued initially under a book-entry only system, registered in the name of CEDE & CO., as registered bondowner and nominee for The Depository Trust Company ("DTC"). DTC will act as securities depository for the Bonds. Individual purchasers of Book-Entry Interests in the Bonds will not receive certificates representing their interest in the Bonds. The scheduled payment of the principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by ASSURED GUARANTY MUNICIPAL CORP. (FORMERLY KNOWN AS FINANCIAL SECURITY ASSURANCE INC.) THE BONDS ARE SUBJECT TO MANDATORY, OPTIONAL AND EXTRAORDINARY OPTIONAL REDEMPTION PRIOR TO MATURITY AS DESCRIBED HEREIN. THE BONDS ARE LIMITED OBLIGATIONS OF KMPA AND ARE PAYABLE SOLELY OUT OF REVENUES, FUNDS AND ASSETS OF THE TRUST ESTATE PLEDGED UNDER THE INDENTURE. KMPA DOES NOT HAVE ANY TAXING POWER. THIS OFFICIAL STATEMENT AND THE APPENDICES ATTACHED HERETO SHOULD BE READ IN THEIR ENTIRETY. NEITHER THE COMMONWEALTH OF KENTUCKY, NOR ANY POLITICAL SUBDIVISION THEREOF OTHER THAN KMPA, NOR ANY MEMBER OF KMPA SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF KENTUCKY OR ANY POLITICAL SUBDIVISION THEREOF OR ANY MEMBER OF KMPA IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON THE BONDS. FOR MATURITIES, INTEREST RATES AND PRICES OR YIELDS, SEE THE INSIDE COVER The Bonds are offered when, as and if issued by KMPA and accepted by the Underwriters, subject to the approval of legality and tax exemption by Rubin & Hays, Bond Counsel, Louisville, Kentucky. Certain legal matters will be passed on for KMPA by its counsel, McMurry & Livingston, PLLC, Paducah, Kentucky and B. Todd Wetzel, Esq., Princeton, Kentucky, and for the Underwriter by its counsel, Rubin & Hays, Louisville, Kentucky. This Official Statement is deemed final for the purposes of SEC Rule 15c2-12(b)(1). Delivery of the Bonds is expected on or about May 27, 2010. J.J.B. HILLIARD, W.L. LYONS, LLC Edward D. Jones & Co., L.P. J.P. Morgan Morgan Keegan & Company, Inc. Raymond James & Associates, Inc. Wells Fargo Securities Dated: May 5, 2010 MATURITY SCHEDULE $53,600,000 KENTUCKY MUNICIPAL POWER AGENCY TAX-EXEMPT POWER SYSTEM REVENUE BONDS (PRAIRIE STATE PROJECT), SERIES 2010A September 1 September 1 CUSIP Year of Interest CUSIP Year of Interest 491501 Maturity Amount Rate Yield 491501 Maturity Amount Rate Yield CA8 2013 $3,365,000 2.000% 1.800% CK6 2018 $3,640,000 3.250% 3.530% CB6 2014 3,440,000 2.100% 2.250% CL4 2019 975,000 3.750% 3.730% CC4 2015 555,000 3.000% 2.650% CM2 2019 3,120,000 3.500% 3.730% CD2 2015 2,980,000 4.000% 2.650% CN0 2020 1,785,000 4.000% 3.900% CE0 2016 3,545,000 3.000% 3.070% CP5 2020 3,800,000 5.000% 3.900% CF7 2016 1,745,000 4.000% 3.070% CQ3 2021 5,860,000 5.000% 4.000% c CG5 2017 745,000 3.500% 3.330% CR1 2022 6,160,000 5.000% 4.020% c CH3 2017 3,090,000 3.000% 3.330% CS9 2023 5,455,000 5.000% 4.060% c CJ9 2018 315,000 3.500% 3.530% CT7 2024 3,025,000 4.000% 4.200% c - Priced to call _______________________________ $122,405,000 KENTUCKY MUNICIPAL POWER AGENCY TAXABLE (BUILD AMERICA BONDS - DIRECT PAY) POWER SYSTEM REVENUE BONDS (PRAIRIE STATE PROJECT), SERIES 2010B $51,365,000 Series 2010B Serial Bonds September 1 September 1 CUSIP Year of Interest CUSIP Year of Interest 491501 Maturity Amount Rate Price 491501 Maturity Amount Rate Price CU4 2023 $1,015,000 5.560% 100 CY6 2027 $7,590,000 6.140% 100 CV2 2024 3,730,000 5.760% 100 CZ3 2028 7,905,000 6.240% 100 CW0 2025 7,020,000 5.910% 100 DA7 2029 8,230,000 6.290% 100 CX8 2026 7,295,000 6.040% 100 DB5 2030 8,580,000 6.390% 100 $71,040,000 Series 2010B Term Bonds $71,040,000 - 6.490% - Term Bonds Due September 1, 2037 - Price 100 - CUSIP# 491501 DC3 _______________________________ $7,725,000 KENTUCKY MUNICIPAL POWER AGENCY TAXABLE POWER SYSTEM REVENUE BONDS (PRAIRIE STATE PROJECT), SERIES 2010C September 1 September 1 CUSIP Year of Interest CUSIP Year of Interest 491501 Maturity Amount Rate Price 491501 Maturity Amount Rate Price DD1 2013 $ 990,000 2.470% 100 DH2 2017 $1,140,000 4.370% 100 DE9 2014 1,010,000 3.020% 100 DJ8 2018 1,190,000 4.820% 100 DF6 2015 1,050,000 3.430% 100 DK5 2019 1,255,000 5.060% 100 DG4 2016 1,090,000 3.980% 100 REGARDING USE OF THIS OFFICIAL STATEMENT No dealer, salesperson or any other person has been authorized by KMPA or the Underwriters to give any information or to make any representations, other than the information and representations contained in this Official Statement, in connection with the offering of the Bonds and, if given or made, such information or representations must not be relied upon as having been authorized by KMPA or the Underwriters. The information in this Official Statement has been furnished by KMPA, the Members and other sources which are considered to be reliable, but is not guaranteed as to accuracy or completeness. The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. The information and expressions of opinion in this Official Statement are subject to change without notice and neither the delivery of this Official Statement nor any sale of the Bonds shall, under any circumstances, create any implication that there has been no change in the affairs of KMPA or the Members since the date of this Official Statement. IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THE BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THIS OFFICIAL STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE BONDS, NOR SHALL THERE BE ANY SALE OF ANY OF THE BONDS BY OR TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OR SALE. This Official Statement contains statements which, to the extent they are not recitations of historical fact, constitute "forward-looking statements." In this respect, the words "estimate," "project," "anticipate," "expect," "intend," "believe" and similar expressions are intended to identify forward-looking statements.